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Netflix and Google Make Land Grab On Edge of Internet 85

An anonymous reader writes "In an end-run around slow Internet backbone providers, Netflix and Google (plus a dozen more large content giants) are in a bitter fight to deploy servers and dominate the consumer edge of the Internet. This Wired article provides some of the first graphics of this fight and how it is changing the underlying Internet infrastructure. The source of the article (DeepField blog post) also has some pretty interesting commentary."
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Netflix and Google Make Land Grab On Edge of Internet

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  • by Trepidity ( 597 ) <delirium-slashdot.hackish@org> on Saturday June 09, 2012 @10:47AM (#40268277)

    As the article notes, from an internet-topology standpoint this isn't that new, dating back to Akamai-type CDNs starting in the 1990s. The idea is that you mirror your content inside several of the major edge networks, so e.g. Comcast users get served from the Comcast-local mirror. You then update the mirror whenever there's new content, but every single user doesn't have to re-fetch that video over the public internet to Comcast's network.

    The main difference is that some of the large content providers are building out their own private CDNs, so Google is setting up its own edge-network mirrors instead of contracting out to Akamai. That's not a major technical change, but could have some important implications for competition.

    • by Anonymous Coward on Saturday June 09, 2012 @10:54AM (#40268323)

      There could be some implications, but I don't think it's that bad. Akamai isn't going anywhere, they actually never delivered Netflix, and have had only limited business with Google, so it's not like they're "losing" anything. So if a competitor to any Google or Netflix comes along, they'll have the option of using Akamai until they're big enough for their own CDN, if that's actually the direction things are headed. On top of that, I would not be surprised if the day comes when Google starts offering its CDN as a service, which will actually add competition for Akamai.

      • by Trepidity ( 597 ) <delirium-slashdot.hackish@org> on Saturday June 09, 2012 @10:59AM (#40268341)

        Yeah, I agree with that. Google and Netflix are basically moving a commodity service in-house, which often makes sense once you're using enough of it. But others can continue to use the commodity service, as long as it continues to exist, which it looks like it will.

        If anything, the basic way bandwidth is billed and peering agreements are arranged is a bigger problem for small players than the edge caches this story is trying to get us worried about. The first problem someone is going to have if they try to compete with YouTube is not CDN access, but the fact that they would have to pay for bandwidth, whereas in many cases Google doesn't. For example, I work at a university, and our university network has a peering agreement with Google: that means that all YouTube watching by students is free to Google. A YouTube-competitor startup would have to pay for transit.

        • by Bengie ( 1121981 )
          It's not so much that Google gets a reduced price, but that your uni gets a reduced price. Google only sees it as an investment to expand their network, not as a way to directly save money.
        • by SunTzuWarmaster ( 930093 ) on Saturday June 09, 2012 @03:30PM (#40269819) Homepage

          Your use of the word 'free' is misplaced. This is vertical integration, plain and simple. In the early 1900s, Andrew Carnegie controlled the iron ore, steel manufacturing (made of iron), railroad tracks (made of steel), and railroad cars (to ship iron to manufacturing/selling, and steel for selling).

          You wouldn't say that the iron was 'free' to Carnegie Steel because they owned the mines, would you? Content provisioning won't be 'free' to Google, as they have to buy/maintain the servers.

          • by mysidia ( 191772 )

            Content provisioning won't be 'free' to Google, as they have to buy/maintain the servers.

            buy/maintaining the servers is "free" (or rather, as good as free) if the result of doing so saves sufficiently more money than the price of purchase+maintenance.

      • by Anonymous Coward

        Actually, yes they do. From the article, netflixed used 3 CDN including akamai which evenly had traffic at about 33%. After it's deployment, other CDNs usage dropped to less then 10% for each while netflixed cdn accounted for 77.6%.

        Will this effect akamai? Maybe but probably not too big, from the opinion of the blog post.

        "Most CDNs would rather focus on higher value (and more profitable) services like analytics, acceleration, and DRM (e.g. see recent CDN product announcements)" from the blog post.

    • by symbolset ( 646467 ) * on Saturday June 09, 2012 @11:00AM (#40268349) Journal
      You can look up peering details at peeringdb [peeringdb.com]. It's kind of neat.
    • by seanzig ( 834642 )

      Agreed, not a major change. However, it might indeed affect competition. I'm glad AT&T has found a way to make money by helping large companies improve bandwidth rather than imposing a tiered system and effectively reducing service delivery for those who couldn't afford it. This attempt at a tiered internet sparked the net neutrality "movement" (if it qualifies as a movement, as such). The idea of private CDN's certainly is a more "positive" approach, but I do wonder if it introduces a precedent tha

    • by thereitis ( 2355426 ) on Saturday June 09, 2012 @12:11PM (#40268763) Journal

      That's not a major technical change, but could have some important implications for competition.

      I think that's the biggest reason for this change: They need to stay competitive with companies that don't have to pay for bandwidth. See Netflix is a bandwidth hog. Who will pay? (Hint: You.) [cnn.com]

      • by Anonymous Coward

        WRONG, you are already paying for all the bandwidth you are using through your $20 - $50 monthly flat rate subscription, content providers should not have to pay anything on top of that some people even suggest that they should be paid by your ISP, the problem is your ISP even with earning millions, or even billions dollars wants more money and is trying to find ways to get bigger part of cookie (check what comcast is doing)

        • What they "should" have to pay is irrelevant; the reality is that (right now) they do have to pay for bandwidth unless they make deals like this.

          • by Bengie ( 1121981 )
            Of course Netflix pays for it's bandwidth, he wasn't arguing that. Netflix pays for its connection to the internet and the customer pays for their connection. As long as everyone pays for their connection, there is no reason to say Netflix is "hogging" the bandwidth, which is what Comcast is trying to say.
        • As much as I also dislike Comcast, there is no sin in optimizing efficiency by moving frequently accessed data closer to the end user - improving the experience as well as cutting costs. It's the right thing to do.
    • by girlintraining ( 1395911 ) on Saturday June 09, 2012 @12:57PM (#40269005)

      That's not a major technical change, but could have some important implications for competition.

      Yes, specifically that it'll fragment the entire network and potentially destroy interoperability across it. The internet would no longer be a unified global network. Network neutrality is the key to preventing this, but as we've seen, corporations don't want that: They want to turn the internet into a largely read-only media... just a better version of television.

      A classic example of how this is shaping up is with Comcast, the Great Evil of the USA internet: They recently instituted a 250GB transfer limit, and then exempted Hulu from it, which they bought out. Netflix, a competing service at a lower price is now sitting out in the cold. Let's run some numbers and see how much of a problem this is. The average person watches 2.7 hours of TV per day; and it remains the single largest leisure activity in the United States. The average Netflix stream (based on my experience), is about 350KB/s. So that comes out to about 3.24GB per person, per day -- or 98.82 per month (the average length of a month). Now the number of people per household is a bit shaky, since there aren't any current numbers, but it's around 2.6 people per. So the average household will consume 257 GB per month if they used Netflix.

      How strange that the bandwith cap is almost exactly the same number eh? Make no mistake -- this is a war between big business, and the only losers will be you and me. This is what happens when you let people into public positions who entertain the notion that capitalism runs best when it isn't regulated. Every infrastructure service in this country runs better with regulation, and the internet (telecommunications) is not an exception. Every time we let the private sector take over, we get crap like Standard Oil, AT&T (pre-breakup), Microsoft, etc. And now we have Montsano eating up our food supply (literally).

      If network neutrality isn't given the force of law in the next two years, then two things are going to happen: Either we start building tunneled networks so all traffic through the last mile ISPs is encrypted and cannot be shaped, modified, or tampered with except in terms of bandwidth and latency as a whole... or we abandon the internet and start a new network that has no last mile restrictions (read: wireless, read: pirate radio).

      • by pnutjam ( 523990 )
        I'd like to see some citations. As far as I know, Hulu is not exempt, only xfinity's video on xbox service is exempt. Plus, the 250GB cap has been around for several years now. AT&T is the new one in the cap business. I run alot of network services, home NX server, netflix all day long (via wii, so not HD) and I am only hitting 150GB / month.
        I am troubled by the implications of capping, but let's keep the discussion grounded in reality.
  • I miss Ma Bell (Score:5, Interesting)

    by NoNonAlphaCharsHere ( 2201864 ) on Saturday June 09, 2012 @10:47AM (#40268279)
    If you look at the upper right corner of the building in TFA's picture, you can see the shadow of the old Bell System logo.
    • by Jawnn ( 445279 )

      If you look at the upper right corner of the building in TFA's picture, you can see the shadow of the old Bell System logo.

      I don't mis Ma Bell at all, because I can remember paying in the neighborhood of a dollar per minute for interstate toll calls, and that was in 1970's dollars. The telecom industry is reconsolidating and has what is arguably the most powerful lobby in Washington. Any way you look at it, that's bad. This twist is just as bad for smaller "web sites". Once the big players have moved all their stuff to their own servers near the edge, Akamai et all will be hurting. That's bad too.

      • The telecom industry is reconsolidating and has what is arguably the most powerful lobby in Washington

        OK, I'll argue. I don't think the telecom industry's lobbying holds a candle to either the banking industry or the insurance industry.

        • by Anonymous Coward

          How much of your life is data? How much of that data goes through the network of your bank and insurance company? Which banks and insurance companies siphoned your data and supplied it to the NSA in violation of US law? Which companies had to be "retroactively" absolved of any legal liability for breaking that law?

          No. Telecom has much more influential lobbying since telecom is the bitch the government want's to have in it's bed. Information is power. With the correct access to information, I could put

        • by Jawnn ( 445279 )
          Banks compete, more or less, in every market. So do insurance companies, more or less. The telecom's, in particular the ILEC's, do not because they enjoy a government sanctioned, nay, mandated monopoly.
          Not that the banksters don't swing a big dick, but it's influence comes from a rather different vector than conventional "lobbying".
  • by asshole felcher ( 2655639 ) on Saturday June 09, 2012 @10:48AM (#40268281)
    Seems a bit dramatic. Google and Netflix use enough bandwidth that they can set up their own CDN. End of Story. If a small competitor comes along, they won't have the money to set up their own CDN, but LLNW, Akamai, and Level3 won't turn them down.
  • by Anonymous Coward on Saturday June 09, 2012 @10:51AM (#40268305)

    From the blog:

    Our most recent data finds that more than 70% of all Internet traffic (on average) comes from just 150 CDN, hosting, cloud and content companies.

    For many Internet users it is essentially now Television Mark 2.

    • Why? The CDNs serve cache for almost everybody. Half of that is probably video cache from the top 3 porn vendors. Would you prefer the long range transports clogged instead? That's bad design.
    • That's largely because you cannot acheive a search listing as a leaf node. If you don't point outward from you site you are judged to have no value.

      This becomes a black-body radiation problem, New conent can go onto the radiant surface anywhere, but it gets lost in the geography becasue if that new content isn't part of a site containing a massive number of outbound links (usually ads and the "natrual link farm" of, say, youtube video pages having links to other youtube video pages) then your site is "benea

    • by Bengie ( 1121981 )
      There has always been many many more consumers than producers of content. Cache that read-only static data closer to the consumer.
  • by Dan East ( 318230 ) on Saturday June 09, 2012 @11:16AM (#40268433) Journal

    Does this provide any leverage to help insure net neutrality by taking some power away from the core backbones, or is it moot since ISPs still reign supreme by providing that last mile connectivity?

    • by Bengie ( 1121981 )
      Core backbone has no problem. Prices are cheap and lots of competition, the issue is the last mile. Local caching is just an efficiency thing. With the HUGE growth of streaming, local caches will take some of the bite out of the growth pain. There are quite a few long-haul high speed 500Gb+ fiber techs around the corner, but they're not quite here yet. Your only options for high speed trunks is expensive equipment or lots of 10Gb fiber. CDNs are going to give us that breathing room while waiting for the new
      • Not true. Telcos have major problems with core backbone traffic. Services like Netflix jump around from provider to provider to get the cheapest rate. If Netflix has a 10gig trunk to level3, telcos will enter a peering agreement with level3 to get a cheaper rate because such a large amount of traffic comes from Netflix. But when netflix drops that trunk and picks one up somewhere else to save money the telcos are left with way to much bandwidth on one network and not enough on another. Suddenly netflix cust
        • We need to have bandwith pricing based on pipe size and not bits delivered per time period.

          Of course since that would make every link symmetric there would be no chash-flow pressure.

          Which is why internet connectivity should be a public good monopoly and not a competetive business.

          The model itself, which was created once people started "charging for site access" and then the bandwith providers decided they wanted a piece of that action, is unsustainable because the Dance of the Sugar-Plumb CDN Providers requ

        • by Bengie ( 1121981 )
          Actually, it's a bit different than what you're saying.

          Netflix used to use Akamai, but then Level3 under-bid them. Akamai is a local cache CDN while Level3 is a Tier1 back-bone that uses it's massive cheap trunks to compete. It is cheaper for Level3 to deliver Netflix over the back-bone than for Akamai to cache the data locally. Akamai is still useful because not all Netflix customer's ISPs have peering with L3.

          Because Level3 is acting as a CDN in the case of Netflix, this means all of the cost of Netfl
  • i.e. putting servers into ISPs to save on everyone's bandwidth bill. Not so much a land grab, just a way of mutually reducing costs.
  • ...is that if content is mirrored inside your provider's network, it's frequently unmetered and thus doesn't count towards your monthly bandwidth limit...

    • Not. The hosted content is with BGP peering. Even though it is often on local 10gb links, it is still seen as a peer outside of your ISP. See NetFlix [netflix.com]

  • by rossdee ( 243626 ) on Saturday June 09, 2012 @12:00PM (#40268693)

    The Internet has an edge? How can that be, the world is a sphere. (And theres no real final frontier of the internet in space yet,.

  • Bitter? (Score:4, Insightful)

    by JamesRing ( 1789222 ) on Saturday June 09, 2012 @12:02PM (#40268703)
    I don't like it when healthy competition between two companies in a capitalist system is described as a "bitter fight" or "war", "battle", etc. It's sensationalist journalism and it completely mischaracterizes the nature of the healthy competition which is necessary for innovation to occur.
  • by paiute ( 550198 ) on Saturday June 09, 2012 @12:17PM (#40268799)
    "...it could possibly bring down subscription rates for high speed internet, subsidized by the content providers."

    I would like to visit his planet. It sounds nice.
    • by mysidia ( 191772 )

      I would like to visit his planet. It sounds nice.

      Content providers will have to subsidize, and fees/limits for accessing non-subsidizing content providers will be to the customer's disadvantage.

      High speed subscription rates will be increased "Because see, we have better connectivity to Google, we're providing you a better service, you should pay more"

  • This could help companies like Netflix get high definition video to consumers, and it could possibly bring down subscription rates for high speed internet, subsidized by the content providers.


    Thanks for that, I needed a good laugh.

  • This isn't what this article is about, but this story reminds me that I would love to see some corporation, say Google, challenge the growing hegemony of telecoms and cable TV companies owning the Internet.

    If we're going to go through all the trouble of building an Internet to replace TV and land line telephones (among other things) then it doesn't make any sense to hand the whole thing over to telecoms and cable companies.

    Remember how all of a sudden all those small local ISPs just up and disappeared? We

    • by dzfoo ( 772245 )

      It doesn't make sense to hand the whole thing to Google and a handful of other CDN companies.


    • by mysidia ( 191772 )

      Remember how all of a sudden all those small local ISPs just up and disappeared? We once had tons of choices for Internet connectivity, now we've got a choice of maybe three corporations, all of whom hate us.

      It's mostly about access to inexpensive pipes into subscribers homes. Before DSL/Cable technologies were developed, access was with dial-up modem, access to the subscribers was easy and inexpensive through POTS service, which is available at a flat rate, thanks to government regulations.

      Cable and

      • In some areas, Naked DSL is offered by the ILEC

        ILECs have been disappearing at a pretty high rate. AT&T does not generally negotiate in good faith with them, and the rules for offering naked DSL are stringent. I think there about 1/2 as many ILECs as there were in 2006.

        • by mysidia ( 191772 )

          ILECs have been disappearing at a pretty high rate. AT&T does not generally negotiate in good faith with them

          Huh? ATT is the ILEC at many exchanges.

  • So Netflix is starting to use its army of Flying Cloud Monkeys [wired.com] as a Content Delivery Network? No wonder the DVDs weren't making it to my mailbox!
  • ..., and it could possibly bring down subscription rates for high speed internet, ...

    Yeah, I don't see that statement as being true. Large web companies will only provide their on-site servers to large ISPs. The large ISPs have no reason to or history of reducing their subscription rates. If the servers were provided to smaller ISPs (such as GWI), then they could lower their rates and become more competitive. Maybe if the servers were provided to tier 2 peering networks, they could pass on the savings to small ISPs? I don't know enough about tiers or peering to know if that's a possibility

  • that is all this is really saying. If they were making their Customers happy and standing up for their interests like net neutrality then they would not be moving to protect their businesses.

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